2017/18 annual report (financials only)

Transcription

1 2017/18 annual report (financials only)

2 treasurer s report The 2018 financial year has seen OzChild enter new jurisdictions delivering innovative programs, resulting in significant increases in operating activity. The 2018 result was highlighted by an operating deficit of $69,561 (2017: deficit of $470,435) with a comprehensive surplus of $623,094 (2017: surplus of $150,100). Financial Year 2018 saw OzChild s operating revenue increase by 43% from the previous financial year (2017 to 2016: 19% increase). This was a result of OzChild s entry into NSW, delivering Functional Family Therapy Child Welfare (FFT-CW) and Multi Systemic Therapy Child Abuse and Neglect (MST-CAN), within the Family Preservation and Restoration domain. OzChild s strategy of investing in evidence based programs has continued, increasing service delivery from three programs in 2017 to 10 programs in 2018, with an additional seven coming on in This, along with organic growth, will see OzChild s operating revenue continue on a growth path for the foreseeable future. OzChild continued to grow its strong asset base with net assets of $25.36M (2017: $24.74M). On behalf of the Finance, Risk, Audit and Compliance Committee, I would like to extend my thanks to Chief Executive Officer Lisa Griffiths and the finance team, led very capably by Chief Operating Officer Mark Powell, for their support and assistance throughout the 2018 financial year. As Treasurer, I am confident the investments we are making into evidence based programs, combined with an ongoing commitment to maintaining high quality service delivery and positive outcomes for children and young people, will provide a strong foundation for OzChild s future financial sustainability. Michael Wootten Treasurer

3 ABN FINANCIAL REPORT

4 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME OPERATING REVENUE Note $ $ Government grants and subsidies 26,624,764 17,483,648 Donations and fundraising activities 391, ,877 Investment income 1,349,570 1,212,076 Fees for service 2,405,607 2,490,534 Other income 226, ,703 TOTAL OPERATING REVENUE 2(a) 30,998,287 21,640,838 OPERATING EXPENSES Operational costs 28,684,716 19,187,883 Fundraising costs 90, ,830 Administration costs 1,619,932 2,187,124 Finance costs 12,678 8,853 Information technology costs 627, ,334 Property costs 31,780 26,249 TOTAL OPERATING EXPENSES 2(b) 31,067,848 22,111,273 OPERATING SURPLUS (DEFICIT) FOR THE YEAR (69,561) (470,435) ENDOWMENT FUNDS REVENUE Investment income 2(a) - 1,807 Increment in endowment funds 2(a) 20,000 40,000 Expenses related to sale of endowment properties 2(a) - - Fair value profit/(loss) on endowment investment properties 2(a) 50, ,000 ENDOWMENT SURPLUS 70, ,807 OPERATING AND ENDOWMENT SURPLUS (DEFICIT) FOR THE YEAR 439 (273,628) OTHER NON OPERATING REVENUE Development Income - 243,898 TOTAL NON OPERATING REVENUE - 243,898 OTHER NON OPERATING EXPENSES Development Expenses - 1,172,120 TOTAL NON OPERATING EXPENSES - 1,172,120 NON OPERATING DEFICIT FOR THE YEAR - (928,222) NET SUPLUS (DEFICIT) FOR THE YEAR 439 (1,201,850) OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to profit or loss Fair value movements on available-for-sale financial assets - managed funds 426, ,950 Items that will not be reclassified to profit or loss Gain on revaluation of service properties 195, ,800 OTHER COMPREHENSIVE SURPLUS 622,655 1,051,750 TOTAL COMPREHENSIVE SURPLUS (DEFICIT) FOR THE YEAR 623,094 (150,100) The surplus for the year includes a non-operating endowment fund surplus of $70,000 (2017: Surplus of $196,807). The income from the endowment funds is available to be applied in accordance with the directions of each endowment towards the services provided by Children Australia Inc. This statement also shows Other Comprehensive Income which includes unrealised gains and losses on market based investments and service properties. The accompanying notes form part of these financial statements.

5 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE, 2018 Note $ $ CURRENT ASSETS Cash and cash equivalents 3 & 15 5,205,565 3,148,725 Receivables 4 & 16 1,029, ,187 Financial assets 5 & 16 5,165,659 2,642,901 Other assets 6 308, ,430 TOTAL CURRENT ASSETS 11,709,807 6,948,243 NON-CURRENT ASSETS Financial assets 5 & 16 18,837,382 18,516,917 Property, plant and equipment 7 5,196,456 4,758,876 Endowment property 7 1,025, ,000 TOTAL NON-CURRENT ASSETS 25,058,838 24,250,793 TOTAL ASSETS 36,768,645 31,199,036 CURRENT LIABILITIES Provisions 8 1,586,864 1,320,383 Other 10 7,626,467 3,099,644 Payables 9 & 16 1,917,436 1,765,000 TOTAL CURRENT LIABILITIES 11,130,768 6,185,027 NON-CURRENT LIABILITIES Provisions 8 277, ,720 TOTAL NON-CURRENT LIABILITIES 277, ,720 TOTAL LIABILITIES 11,408,261 6,461,747 NET ASSETS 25,360,383 24,737,289 EQUITY Endowment funds 11 18,041,400 17,971,400 Asset revaluation reserve 12 2,925,285 2,729,433 Financial asset valuation reserve 13 3,853,788 3,426,987 Accumulated surplus/(deficit) 539, ,469 TOTAL EQUITY 25,360,383 24,737,289 The accompanying notes form part of these financial statements.

6 STATEMENT OF CHANGES IN EQUITY Endowment Funds Asset Revaluation Reserve Financial Asset Valuation Reserve Accumulated Surplus (Deficit) $ $ $ $ $ Balance at 30 June ,774,593 2,545,633 2,559,037 2,008,126 24,887,389 Operating Profit - - (470,435) (470,435) Increment in endowment investment properties 155, ,000 Investment income 1, ,807 Increment in endowment investment funds 40, ,000 Change in market value of managed funds - 867, ,950 Gain on revaluation of service properties - 183, ,800 Development Income 243, ,898 Development Expenses (1,172,120) (1,172,120) Balance at 30 June ,971,400 2,729,433 3,426, ,471 24,737,289 Total Operating Profit (69,561) (69,561) Increment in endowment investment properties 50,000 50,000 Expenses related to sale of endowment properties - Investment income - - Increment in endowment investment funds 20,000 20,000 Change in market value of managed funds 426, ,802 Gain on revaluation of service properties 195, ,853 Development Income - - Development Expenses - - Balance at 30 June ,041,400 2,925,285 3,853, ,909 25,360,383 The accompanying notes form part of these financial statements.

7 STATEMENT OF CASH FLOWS Note $ $ Receipts from customers 31,036,888 20,167,289 Payments to suppliers, employees and others (30,485,962) (22,354,040) Donations and fundraising 391, ,877 Interest, dividends and distributions received 1,349,570 1,213,883 Fee for service 2,405,607 2,490,534 Other income 246, ,703 Net Cashflows from operating activities 4,944,450 1,972,246 Payments for property, plant and equipment (529,657) (625,678) Payments for investments (7,837,655) (6,142,829) Proceeds from investments 5,479,702 5,565,927 Net Cashflows from investing activities (2,887,610) (1,202,580) Net increase (decrease) in cash held 2,056, ,666 Cash at the beginning of the year 3,148,725 2,379,059 Cash at the end of the financial year 15(a) 5,205,565 3,148,725 The accompanying notes form part of these financial statements.

8 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements cover Children Australia Inc. as an individual entity. Children Australia Inc. is a Not-For-Profit Association incorporated in Victoria under the Associations Incorporation Reform Act 2012 The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board, the Associations Incorporation Reform Act 2012 and the Australian Charities and Not-For-Profits Commission Act The Financial Statements are presented in Australian dollars which is the Association's functional and presentation currency. The amounts presented in the financial statements have been rounded to the nearest dollar. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of the financial statements are presented below and have been consistently applied unless otherwise stated. The financial statements, except for the cash flow information have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. The financial report was authorised for issue on 15th of October 2018 by the Board of Managment (a) Property, plant and equipment and endowment properties Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated depreciation and impairment losses. Endowment properties have been acquired for long term investment purposes. Changes to fair values of the investment in endowment properties are recorded in the statement of profit or loss and other comprehensive income. All tenant leases are on an arm's length basis. The depreciable amount of all other fixed assets are depreciated over the useful lives of the assets to the association commencing from the time the asset is held ready for use, using the straight line basis. Leasehold improvements are depreciated over the unexpired period of the lease. The depreciation rates used for each class of depreciable assets are: Class Rate Buildings 3% Motor vehicles 20% Furniture and equipment 20% - 33% Leasehold improvements 25% - 60% (b) Leases Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred. (c) Employee benefits Provision is made for Children Australia Inc.'s liability for employee benefits arising from services rendered by employees to balance date. Employee benefits expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled plus related on-costs. Other employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. (d) Revenue Revenue is measured at the fair value of the consideration received or receivable. Grant revenue is recognised in the statement of profit and loss and other comprehensive income when the entity obtains control of the grant and it is probable that the economic benefits gained from the grant will flow to the entity and the amount of the grant can be measured reliably. Revenue from the rendering of a service is recognised upon invoice following the delivery of the service to the customer. Rental income is recognised when due and receivable. Donations and fundraising revenue is recognised when received. Interest revenue is recognised using the effective interest rate method taking into account the interest rates applicable.

9 Dividends and franking credit rebates are recognised when the right to receive the dividend has been established. (e) Inventories Inventories are valued at the lower of cost and net realisable value. (f) Income tax Children Australia Inc. is exempt from income tax under Division 50 of the Income Tax Assessment Act (g) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except where the GST is not recoverable. (h) Financial instruments Initial Recognition and Measurement Financial instruments, incorporating financial assets and financial liabilities, are recognised when the association becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention. Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified at fair value through profit or loss in which case transaction costs are recognised immediately as expenses in profit or loss.. Financial instruments are classified and measured as set out below. Classification and Subsequent Measurement (i) Financial assets at fair value through profit or loss Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of shortterm profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying amount being included in profit or loss. (ii) (iii) (iv) Loans and Receivables Loans and Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method. Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the association s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method. Available-for-sale investments Available-for-sale investments are non-derivative financial assets that are either not capable of being classified into other categories of financial assets due to their nature or they are designated as such by management. They comprise investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments. They are subsequently measured at fair value with any remeasurements other than impairment losses and foreign exchange gains and losses recognised in other comprehensive income. When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss. Available-for-sale financial assets are classified as non-current assets when they are not expected to be sold within 12 months after the end of the reporting period. All other available-for-sale financial assets are classified as current assets. (v) Financial Liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost using the effective interest rate method.

10 Impairment - Financial Assets At each reporting date, the association assesses whether there is objective evidence that a financial asset has been impaired. In the case of available-for-sale financial assets, a significant or prolonged decline in the market value of the asset is considered to determine whether an impairment loss has arisen. Impairment losses are recognised in the statement of profit and loss and other comprehensive income. Derecognition Financial assets are derecognised where the contractual right to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in the statement of profit and loss and other comprehensive income. (i) Fair Value Children Australia Inc. measures some of its assets at fair value on a recurring basis. Fair value is the price the association would receive to sell an asset or would have to pay to transfer a liability in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date. As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. To the extent possible, market information is extracted from either the principal market for the asset or liability (i.e. the market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the most advantageous market available to the entity at reporting date (i.e. the market that maximises the receipts from the sale of the asset or minimises the payment made to transfer the liability, after taking into account transaction costs and transport costs). For non-financial assets, the fair value measurement also takes into account a market participant s ability to use the asset in its highest and best use, or to sell it to another market participant that would use the asset in its highest and best use. The fair value of liabilities and the entity s own equity instruments (excluding those related to share-based payment arrangements) may be valued, where there is no observable market price in relation to the transfer of such financial instrument by reference to observable market information where such instruments are held as assets. Where this information is not available, other valuation techniques are adopted and, where significant, are detailed in the respective note to the financial statements. (j) Impairment - Other Assets At each reporting date Children Australia Inc. reviews the carrying value of its assets to determine whether there is any indication that those assets have been impaired. Any excess of an asset's carrying value over its recoverable amount is recognised in the statement of profit and loss and other comprehensive income. (k) Provisions Provisions are recognised when the association has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions recognised represent the best estimate of the amounts required to settle the obligation at the end of the reporting period. (l) Cash and Cash Equivalents Cash is cash on hand or available on demand. (m) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

11 (o) Critical Accounting Estimates and Judgments The Board evaluates the estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current data. As per Note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into account NOTE 2: OPERATING SURPLUS ( DEFICIT) $ $ (a) Revenue Operating activities - government grants and subsidies 26,624,764 17,483,648 - donations and fundraising activities 391, ,877 - rent from properties 72,617 52,142 - fees for service 2,405,607 2,490,534 - interest 149,121 92,411 - dividends and distributions 1,127,833 1,067,523 - other income 226, ,703 30,998,287 21,640,838 Non-operating activities - investment income/(loss) - 1,807 - DP endowment funds 20,000 40,000 - increment in value of endowment properties 50, ,000 70, ,807 (b) Expenses Operating activities - salaries and wages 19,562,004 14,065,343 - general operating expenses 10,384,351 6,946,738 - rental expense and operating leases 847, ,256 - finance costs 12,678 8,853 - depreciation expense 229, ,834 - property costs 31,780 26,249 31,067,848 22,111,273 NOTE 3: CASH AND CASH EQUIVALENTS Cash on hand (non interest bearing) 81, ,384 Cash at bank (interest bearing) 5,124,110 3,043,341 5,205,565 3,148,725 Cash is on hand or available on demand. Interest rates are variable and reflect current market rates.

12 NOTE 4: RECEIVABLES $ $ Current Trade debtors 444, ,067 Sundry debtors 76,349 87,925 Distributions and interest receivable 465, ,074 Stock 5,203 7,902 Security deposits 38,635 13,219 1,029, ,187 No interest is payable on receivables. NOTE 5: FINANCIAL ASSETS Current - Term deposits - Operating 5,000,000 2,500,000 - Term deposits - Edith & Maurice Feitel Fund 102, ,000 - Term deposits - DP 40,000 20,000 - Term deposits - Murison Trust 23,051 22,901 5,165,659 2,642,901 Non-Current Available-for-sale financial assets - Managed portfolios - Endowment Fund 28,029 27,551 - Managed portfolios - General 273, ,287 - Managed portfolios - Emerald Hill 13,931,186 13,693,935 - Managed portfolios - Ellis Estate 4,584,215 4,506,144 - Shares - at fair value 20,000 20,000 18,837,382 18,516,917 24,003,042 21,159,818 Investments earn interest/distributions at a weighted average rate of 4.7% ( %). The unrealised capital movement from managed portfolios is not included in this rate. NOTE 6: OTHER ASSETS Prepayments 308, ,430

13 NOTE 7: PROPERTY, PLANT AND EQUIPMENT AND ENDOWMENT PROPERTY $ $ a) Service property, plant and equipment Land at independent valuation (2018) - Note (ii) 2,065,689 Land at independent valuation (2017) - Note (ii) 1,903,636 Buildings at independent valuation (2018) - Note (ii) 2,424,311 Buildings at independent valuation (2017) - Note (ii) 2,335,000 Total service properties 4,490,000 4,238,636 Motor vehicles at cost 48,023 48,023 less accumulated depreciation (44,303) (42,883) 3,720 5,140 Furniture and equipment at cost 2,085,611 1,682,430 less accumulated depreciation (1,529,358) (1,337,354) 556, ,076 Leasehold improvements 370, ,512 less accumulated amortisation (224,194) (188,488) 146, ,024 Total administration property, plant and equipment 5,196,456 4,758,876 b) Ellis Estate land and buildings at independent valuation - Note (i) 329, ,896 Emerald Hill land and buildings at independent valuation - Note (i) 695, ,104 Total endowment properties 1,025, ,000 (i) (ii) One endowment property in the Western Region is self occupied and partially leased to external parties. The other property in the Western Region is partially leased to an external party. Land and buildings were valued by Teska Carson as at 30 June 2018 based on open market values.

14 PROPERTY, PLANT AND EQUIPMENT (c) Movements in Carrying Amounts Movement in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year. Reclassification 2018 to non current Depreciation Opening Depreciation assets held / Amortisation Class of Asset balance write-back Reclassify Additions Disposals Transfers for sale Expense Revaluation Closing balance $ $ $ $ $ $ $ $ $ $ Land 1,903, ,053 2,065,689 Buildings 2,335,000 58, , (58,800) (25,000) 2,424,311 Endowment 975, ,000 1,025,000 properties Service Property, 345, , (192,004) - 556,253 furniture & equipment Leasehold 105, , (35,706) - 81,983 improvements Leasehold 64, ,500 improvements - make good Motor vehicles 5, (1,420) - 3,720 TOTAL 5,733,876 58, , (287,930) 187,053 6,221,456

15 NOTE 8: PROVISIONS $ $ Current Employee benefits 1,586,864 1,320,383 1,586,864 1,320,383 Non-Current Employee benefits 212, ,220 Provision for lease make good 64,500 64, , ,720 Total Provisions 1,864,358 1,597,103 Balance at the start of the year 1,597,103 1,401,031 Additional provisions 1,402,443 1,025,852 Amounts used (1,135,188) (829,780) 1,864,358 1,597,103 NOTE 9: PAYABLES Trade payables 976, ,823 Sundry payables and accrued expenses 940,976 1,252,177 1,917,436 1,765,000 NOTE 10: OTHER LIABILITY Deferred Income 7,626,467 3,099,644 7,626,467 3,099,644

16 $ $ NOTE 11: ENDOWMENT FUNDS General endowment 179, ,398 Emerald Hill endowment 10,560,322 10,526,810 Ellis Estate endowment 6,964,405 6,948,493 Yallum endowment 30,606 30,148 J.C. Butler scholarship 7,918 7,800 McNaughton trust 114, ,851 Gregory trust 1,000 1,000 Murison trust 22,900 22,900 Edith and Maurice Feitel trust 100, ,000 DP Endowment 60,000 40,000 18,041,400 17,971,400 Movement in Endowment Funds General endowment Balance at start of the year 179, ,398 Balance at the end of the year 179, ,398 Emerald Hill endowment Balance at start of the year 10,526,810 10,421,710 Increment/(decrement) in investment properties 33, ,100 Balance at the end of the year 10,560,322 10,526,810 Ellis Estate endowment Balance at start of the year 6,948,493 6,898,593 Increment/(decrement) in investment properties 15,911 49,900 Balance at the end of the year 6,964,405 6,948,493 Yallum endowment Balance at the start of the year 30,148 28,712 Interest income 458 1,436 Balance at the end of the year 30,606 30,148

17 NOTE 11: ENDOWMENT FUNDS (continued) $ $ Movement in Endowment Funds (continued) J.C. Butler scholarship Balance at the start of the year 7,800 7,429 Interest income Balance at the end of the year 7,918 7,800 Edith and Maurice Feitel trust Balance at the start of the year 100, ,000 Balance at the end of the year 100, ,000 David Pincus Endowment Balance at the start of the year 40,000 40,000 Additional Endowment Contribution 20,000 - Balance at the end of the year 60,000 40,000 The income from but not the capital of endowment funds can be used for the operations of Children Australia Inc. NOTE 12: ASSET REVALUATION RESERVE The asset revaluation reserve records revaluations of land and buildings. NOTE 13: FINANCIAL ASSET VALUATION RESERVE The financial asset valuation reserve records the change in market value of managed funds. NOTE 14: OPERATING LEASE COMMITMENTS Operating leases relating to the motor vehicle fleet and office rentals. Payable - not later than one year 1,006, ,208 - later than one year but not later than five years 1,207, ,924 2,214,145 1,026,132

18 NOTE 15: CASH FLOW INFORMATION (a) Cash Reconciliation For the purposes of the cash flow statement, cash includes cash on hand and at bank Cash at the end of the year is shown in the balance sheet as: $ $ Cash and Cash Equivalents Note 3 5,205,565 3,148,725 5,205,565 3,148,725 NOTE 16: (a) FINANCIAL RISK MANAGEMENT Financial Risk Management Policies The association s financial instruments consist mainly of deposits with banks, long term investments that comprise of Australian fixed interest, shares and cash management accounts, accounts receivable and accounts payable $ $ Financial Assets Cash and cash equivalents 5,205,565 3,148,725 Term Deposits-held to maturity 5,165,659 2,642,901 Managed Portfolios- available for sale 18,837,382 18,516,917 Receivables 1,029, ,187 30,238,492 25,223,730 Financial Liabilities Trade Payables 1,917,436 1,765,000 1,917,436 1,765,000 (b) Net Fair Values For listed available-for-sale financial assets and financial assets at fair value through profit or loss the fair values have been based on closing quoted bid prices at the end of the reporting period. In determining the fair values of the unlisted available for sale financial assets, the Board of Management have used inputs that are observable either directly (as prices) or indirectly (derived from prices). Fair values of held-to-maturity investments are based on quoted market prices at the end of the reporting period. Fair values of held-to-maturity term deposits generally reprice to a market interest rate every six months. This therefore approximates fair value.

19 NOTE 17: RELATED PARTY TRANSACTIONS Board member, Catherine Dunlop is a partner at Maddocks Lawyers. Maddocks Lawyers were paid $17,212 for legal services in the 2018 financial year. All members of the Board of Management acted in an honorary capacity. NOTE 18: KEY MANAGEMENT PERSONNEL COMPENSATION $ $ Total Compensation 961, ,451 NOTE 19: NOTE TO STATEMENT OF CASHFLOWS Operating Profit/(Deficit) (69,561) (470,435) Non Operating Profit(Deficit) - (928,222) Net Operating Profit/(Deficit) for cashflow purposes (69,561) (1,398,657) Non-cash flows in operating surplus Depreciation 229, ,227 Endowment operating surplus Investment income - 1,807 Changes in assets and liabilities (Increase) decrease in debtors (114,729) (127,731) (Increase) decrease in other assets (67,268) (79,873) (Increase) decrease in financial assets 20,000 - Increase(decrease) in payables 152, ,927 Increase(decrease) in provisions 267, ,072 Increase(decrease) in income in advance 4,526,793 2,567,474 Cashflow from operating activities 4,944,388 1,972,246 NOTE 20 EVENTS AFTER THE REPORTING PERIOD The Board of Management is not aware of any significant events since the end of the reporting period. NOTE 21 ASSOCIATION DETAILS The registered office of the association is: Children Australia Inc. Level 3, 150 Albert Road SOUTH MELBOURNE VIC 3205

20 Children Australia Inc. ABN: Board of Management Declaration The board of management of the association declare that: 1. The financial statements and notes of Children Australia Inc., as set out on pages 1 to 16, are in accordance with the Associations Incorporation Reform Act 2012 and the Australian Charities and Not-for-profits Commission Act 2012, including: a) complying with Australian Accounting Standards Reduced Disclosure Requirements (including Australian Accounting Interpretations), the Associations Incorporation Reform Act 2012 and the Australian Charities and Not-for-profits Commission Act 2012; and b) giving a true and fair view of the financial position as at 30 June 2018 and of the performance for the year ended on that date of the association. 2. In the board of management s opinion, there are reasonable grounds to believe that the association will be able to pay its debts as and when they become due and payable. Signed in accordance with a resolution of the Board of Management President: Helen Maxwell-Wright Treasurer: Michael Wootten Dated this 15 th day of October 2018

21 Independent Auditor s Report to the Members of Children Australia Incorporated Opinion We have audited the financial report of Children Australia Incorporated. (the association), which comprises the statement of financial position as at 30 June 2018, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information, and the statement by members of the committee on the annual statements giving a true and fair view of the financial position of the association. In our opinion, the accompanying financial report is in accordance with the Division 60 of the Australian Charities and Not-for-profits Commission Act 2012, including: (a) giving a true and fair view of the financial position of Children Australia Incorporated (the association) as at 30 June 2018 and of its financial performance for the year then ended; and (b) complying with Australian Accounting Standards Reduced Disclosure Requirements and the Australian Charities and Not-for-profits Commission Regulation Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the association in accordance with the auditor independence requirements of the Accounting Professional and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Responsibilities of Management and the Committee for the Financial Report The committee of the association is responsible for the preparation and fair presentation of the financial report in accordance with the financial reporting requirements of the applicable legislation and for such internal control as the committee determine is necessary to enable the preparation and fair presentation of a financial report that is free from material misstatement, whether due to fraud or error. In preparing the financial report, the committee is responsible for assessing the association s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the committee either intend to liquidate the association or to cease operations, or has no realistic alternative but to do so. The committee of the association is responsible for overseeing the entity s financial reporting process. Crowe Horwath Melbourne is a member of Crowe Horwath International, a Swiss verein. Each member of Crowe Horwath is a separate and independent legal entity. Liability limited by a scheme approved under Professional Standards Legislation. Liability limited other than for the acts or omissions of financial services licensees. The title Partner conveys that the person is a senior member within their respective division, and is among the group of persons who hold an equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership is the Crowe Horwath external audit division. All other professional services offered by Findex Group Limited are conducted by a privately owned organisation and/or its subsidiaries.

22 Auditor s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Entity to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the committee of the association regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during the audit. CROWE HORWATH MELBOURNE JOHN GAVENS Partner Melbourne, Victoria Dated this 15 day of October 2018

23 contact us today to find out how you can change a life. National Support Office Level 3, 150 Albert Road South Melbourne VIC 3205 T. (03) VICTORIA Heatherton Road 1536 Heatherton Road Dandenong VIC 3175 T. (03) Frankston Level 2, Nepean Highway Frankston VIC 3199 T. (03) Trafalgar PO Box 415 Trafalgar VIC 3823 T. (03) NSW Blacktown Ground Floor 38 Prince Street Blacktown NSW 2148 Dandenong Level 1, 47 Princes Highway Dandenong VIC 3175 T. (03) Mitcham Unit 1 5 Redland Drive Mitcham VIC 3132 Warrnambool 19 Jamieson Street Warrnambool VIC 3280 T T Campbelltown Level 1 63 Queens Street Campbelltown NSW 2560 Mornington 947 Nepean Highway Mornington VIC 3931 T. (03) Pakenham 126 Princes Highway Pakenham VIC 3810 T. (03) Shepparton 56 High Street Shepperton VIC 3630 Edgeworth Unit Main Road Edgeworth NSW 2285 QLD Ipswich Building 5 22 Magnolia Drive Brookwater QLD 4300 Toowoomba 208 James Street Toowoomba QLD 4350 ACT 26 Thynne Street Bruce ACT 2617 T. (02) ozchild.org.au ozchild annual report 2018 OzChild Children Australia Inc ABN OzChild is an Income Tax Exempt Charitable Entity and Deductible Gift Recipient. OzChild is commited to continually improving our services and processes. Our quality system is accredited against ISO9001.